03 December 2014

It's a bit over a year since the last Federal election and I had been considering doing a post to show the changes that have occurred in the tax-transfer system over the first 12 months of Parliament 44. I have to confess though, that the charts showing the 12 month results are, for the most part, pretty boring, and to date this had stayed my hand.

However, I have been intrigued by the continuing coverage that the Government's first budget has been getting, a recent example being this opinion piece by Ross Gittins. The article outlines a number of budget measures that might be perceived as unfair, suggesting that this is giving the Government continuing grief, popularity-wise. What struck me about this is that almost none of the measures mentioned in the article have actually come into effect, having been held up, voted down or amended by the Senate.

In fact, despite the rhetoric around the impact of the Government's budget measures, the changes to the tax transfer system that have actually occurred over the first 12 months arguably look more like stereotypical Labor outcomes. That's not to say that this will remain the case. Many budget measures have had their implementation dates pushed back as part of the wheeling and dealing to get them through Parliament. Others are still before Parliament and may yet see the legislative light of day. But the key thing, for me at least, is that most of the 'horror' budget has yet to actually bite.

So, let's look at how the first 12 months has treated some selected household types, but with an added twist: we'll also look at what the Government had intended to achieve, tax-transfer wise, and thus see the difference between intention and outcome.

15 September 2014

As is usual, on 20 September 2014 the rates of a number of payments in the Australian social security system will be adjusted to take into account increases in the consumer price index (CPI). The new rates were formally announced via this press release, with a detailed set of tables provided in the attachments available here.

One of the many figures provided in those tables is the 'partner income free area' and its new value appears to be the only clue that a wrong has been righted. That correction should, it appears, provide an increase in payment rates to some couple households that is significantly larger than announced in the press release.

11 March 2014

The rate of Newstart allowance (NSA) is adjusted twice a year - on 20 March and 20 September - in line with upward movements in the consumer price index (CPI). This time round, the various NSA rates (and some associated payments) will increase by 1.9%. Coinciding with these changes, the amount of private income a person can have before NSA is reduced under the income test is also being increased, from $62 a fortnight to $100 a fortnight. This will be the first increase in the "income free area" or "allowable income" since 1 July 2000 when it was increased by $2 a fortnight as part of a range of measures intended to compensate for the introduction of the goods and services tax.

While the CPI based rate increases have received some coverage (go here for the press release and here for a detailed list of the changes), the increase in the income free area hasn't had much at all. So, herewith, a few charts showing the combined effect of the CPI rate increases and the changed income test free area!

25 January 2014

Note: I edited this post on 19 February 2014 to replace Chart 5 with the correct chart (mistakenly, the original was for the yet to be completed Parliament 44).A little over a year ago I wrote a post
about how tax-transfer system changes made by Parliament 43 had affected 9
different household types.At the time
Parliament 43 was still a going concern, making the picture I painted
incomplete.We are now well into
Parliament 44 so it’s possible to redo the Parliament 43 post with results for
the entire period.I’ve also been giving
some attention to 5 additional household types since the original post, so this
one will cover 14 in total.